Politics hurts Club Med in Phuket Thailand

Vacances Siam (Club Med) Ltd expects the performance of Club Med Phuket will improve in the third quarter of this year if local political uncertainties ease. Chavalin Rodsawaddi, the company's country marketing and sales manager, said the occupancy rate of Club Med Phuket has been around 50% since the Songkran riots, down from 80-90% in normal times.

But this is still higher than the 20-30% rates of nearby hotels on Karon beach. "Many international tourists have shifted from Club Med Phuket to Club Med Bali and the Maldives because they are very sensitive to political issues here," said Mr Chavalin.At least 100 Thais per month have made reservations with Club Med to go to either Bali or the Maldives. Mr Chavalin expects reservations for Club Med Bali will increase at least 10% this year, while the Phuket property will contract from 80-90% last year, and the Maldives will have flat growth.

The turnover for properties in the region this year will be on par with last year, due mainly to the global economic recession. Tourism worldwide has been affected, not just in Asia Pacific, said Caroline Puechoultres, president & CEO for Asia Pacific Club Med. "It is a good time to gain market share from rivals like luxury hotels because many customers are downgrading their accommodations and looking for value-for-money services," she said. Ms Puechoultres believes that people still travel when the economy is bad but they spend less and shorten their stays.

According to Club Med, about 80% of its customers will not change their vacation plans and 61% feel that all-inclusive packages are more attractive in today's economic climate. "Occupancy rates and reservations at five-star hotels in Asia will drop this year due to the downturn," she said. The company plans to expand its business to new destinations including China, Vietnam, and Cambodia. It plans to add one project each in the Maldives and Japan. The investment plan will start when the global economy improves. Initially, it plans to open two resorts in China - one each for ski and beach locations. The company sees high potential in China due to its rapid economic growth during the past few years. Club Med now has 80 properties worldwide and 10 in Asia-Pacific. Source: Bangkok Post